It might seem a bit soon to be talking about the recovery but sooner or later it will come and having worked through the last 4 recessions in the housing market believe me when I say that the upturn will be the time of greatest danger for most businesses.
A lot of residential estate agency firms will survive 2020 by furloughing most of their staff, cutting all possible discretionary expenditure, deferring their VAT bill, deferring their personal tax bill, not paying their corporation tax bill, not paying the rent on their shop premises , not paying business rates and deferring payment to their suppliers.
A combination of these actions may keep the lights on for the rest of the year but in 2021 the day of reckoning will inevitably come.
The key to surviving the upturn will be to make sure that your business is ready to benefit from it fully when it comes so what can you do now to prepare for this?
Well here are 7 ideas…
The first thing you need to do is to preserve your current pipeline of sales in progress.
The government have told people to postpone their move if at all possible and this is making both vendors and purchasers very edgy so you need to be all over these sales in order to make sure that you maintain goodwill, calm peoples fears and get the sales over the line as soon as possible so that you get paid.
The second thing you need to do is to have an in depth conversation with every single one of your existing vendors.
The last thing you can afford is for them to take their properties off the market so you need to reassure them that the market will resume soon and remind them of that the reasons why they wanted to move are, in most cases , still valid.
The third thing you need to do is to prepare your current vendors for the possibility of a price reduction.
No one knows how long this crisis will last, how it will end or what impact it will have on house prices but some forecasters are predicting a fall in house prices of 10 to 20%. You need to prepare your clients for this possibility
The fourth thing you need to do is to rank your existing instructions in order of how motivated the vendor is to sell.
Some of you will remember doing this in 2008/2009 When you have limited staff and resources you must prioritise the properties that are most likely to sell and earn you a fee.
The fifth thing you need to do is to go through all your old prospects to see how many of them are considering a move when the market recovers.
These should include valuations that did not come to the market, withdrawn instructions and past purchasers and vendors who may be ready to move again.
Now is a great time to making these phone calls as almost everyone will be in and will have more time than usual to talk to you.
The sixth thing to focus on is your marketing. There is a delay of around six months between carrying out a valuation and completing the sale and getting paid so if you stop all your marketing now you will have a big hole in your cash flow in six months’ time.
There is great value to be had now . For example the cost of Google AdWords has dropped hugely over the last couple of weeks.
You may get less clicks than usual but those that do click through will be very motivated sellers.
Finally don’t forget to push cross selling opportunities such as conveyancing and mortgage services.
Most of your clients will have more time than usual to talk about these things and each extra product sale will significantly increase your average revenue per sale
The action that you take now will determine how quickly your business recovers from the current downturn so make sure that you use every minute of this precious quiet time wisely
Strange article- As an agent if you are not already doing all of the above in a normal marketplace, bar preparing vendors for a 10-20% price drop, then you really need to buck your ideas up- this is basic estate agency.
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Strange response – you may be right, but all Mr Walker is trying to do is encourage agents who are fearful that their jobs might be on the line, and agency bosses who are super-stressed that they may not have a business left by the end of the year. However “basic” the advice might be, giving people something positive to concentrate on, some hope, a shaft of light at the end of the tunnel … surely that’s not such a bad thing … is it??? I’m not sure telling people to buck their ideas up at such a difficult time is particularly motivational.
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At least Adam is trying to be constructive. It may be ‘basic estate agency’ but that doesn’t make it wrong.
It seems to be the 3rd point is the most interesting: for 5 years we’ve had a gap between market prices and vendor expectations. In the ‘upturn’ how many vendors will be distressed sellers, who have little choice but to meet the market price?
Or how many will refuse to lower their prices.
Plus how many divorcing sales will there be? Figures coming out of Wuhan suggest lockdown = not good for domestic relations.
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It seem a bit too soon to be talking about the recovery says Adam.
Absolutely NOT. Anyone who is yet not focused on that we needs to get their skates on.
That said, as with all other businesses in the UK, (world?) having to deal with the ton of stuff to stabilise the ship has been/is a mammoth task in itself.
But Adam is right to be looking forward and so too must we, otherwise we will lose hope.
Winston Churchill once wrote.
Success is about leaping from failure to failure without loss of enthusiasm.
Stay safe everyone.
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Adam has much experience in all areas of estate agency and is a trusted advisor to many. I’ve used his services over the years.
There are too many agents who only plan ahead week by week seemingly, so this advice is very valid, and a wake up call to the many who simply ‘coast along’.
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Some decent if not mostly obvious advice from Adam. Pipeline protection is key.
The balance has to be reducing costs immediately in order to survive whilst at the same time not cutting too deep you have no one left working on the recovery-which will come. Miss the recovery at your peril would be my advice.
Expect the best but plan for the worst. Its all balance.
Tom
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Thumbs up Adam
Not a hint of wild wide boy optimism about this being an opportunity; just sensible practical advice.
Well done….
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